US President Donald Trump has revoked an Obama-era federal guideline forcing public schools to allow students to use the bathroom corresponding to their chosen gender identity.

Though the Obama administration published the directive as a set of guidelines, schools were warned they would lose funding if they did not comply.

Trump has said several times that his administration is "determined to protect the rights of all Americans, including the LGBTQ community." However, he also said the issue of bathroom segregation belongs to the state and local authorities, and the federal government should not intervene.

White House Press Secretary Sean Spicer on Wednesday said Trump, "is a firm believer in states’ rights."

Obama's guidelines were put on hold by a Texas federal judge after 13 states sued, arguing the federal government had overstepped its bounds.

Meanwhile, transgender advocacy groups insisted the "law" was necessary in order to protect trans students from discrimination.

Conservative activists hailed Trump's announcement, saying Obama's directives were illegal and violated the rights of cisgender students, especially girls who did not feel safe changing or using the restroom next to anatomical males. Parents of young girls also felt threatened.

One transgender activist, Caitlyn Jenner, tweeted on Saturday, "This is a disaster. See you in court."